InterGlobe Aviation, IndiGo Airlines’ parent company, is experiencing a significant upward trend in its stock price, marking the longest winning streak since it was listed in November 2015.
The stock has been on an upward trend for the twelfth consecutive day as of December 13, setting a new record for continuous gains, surpassing its previous record of 11 consecutive days of positive movement.
The stock rose as much as 2.5 percent during intraday trading on this day, reaching a new all-time high of $3,006.90. It has now increased by 66 percent since its 52-week low of 1,810.45 on March 28, 2023.
The airline stock has increased by 17 percent in the last 12 trading sessions.
This outstanding performance suggests a strong and sustained positive trend, which is attracting investor attention and potentially reflecting positive sentiment toward the company. Because of the stock’s recent record-breaking streak, investors and market participants will most likely continue to monitor its performance.
IndiGo shares have risen as a result of a sharp drop in crude oil prices, which fell more than 4% on December 12. Brent Crude, the global benchmark, is now approaching $73 per barrel, a level not seen since March 2023. This drop in oil prices is especially significant for airlines, including IndiGo, because jet fuel costs account for nearly 40% of total expenses.
Lower fuel costs have benefited not only IndiGo but also other airlines in the industry, including SpiceJet, Air India, and Akasa.
The stock has also gained more than 42% in the last year and nearly 50% in 2023 YTD, with positive returns in 8 of the last 12 months. It has risen 10% so far in December, extending gains for the third month in a row since October. It increased by more than 26% between October and December. It increased by 17.4 percent in May and decreased by 12.6 percent in February.
Meanwhile, in a December 1 note, brokerage house Kotak Institutional Equities maintained a ‘buy’ rating on InterGlobe Aviation and raised its price target to 3,300 per share. The brokerage firm expects higher yields to last for an extended period of time, despite capacity constraints. Despite the growing price disparity between airlines and railways over the last three years, customers have not shifted significantly to the lower-cost AC rail option.
InterGlobe Aviation’s earnings per share (EPS) are expected to be 175.2 in FY25E and 198.5 in FY26E, according to Kotak. The positive outlook for IndiGo is due to the continued upside risks to yields in FY25.
This analysis reflects Kotak’s bullish outlook on the airline industry, particularly for IndiGo, given the expected continuation of favorable pricing dynamics and potential earnings growth. This information may be useful to investors when making investment decisions involving InterGlobe Aviation stock.
Axis Securities’ Technical Analysis
Interglobe Aviation (IndiGo) | Purchasing range: 2,840-2,783 | Target price: 3,034-3,150 | Stop loss: 2,700
IndiGo has broken out above the rounded bottom pattern at the 2,745 level, indicating that the medium-term uptrend is continuing.
The stock has broken out with a breakout gap, indicating that it is on the rise. It has closed above the upper weekly Bollinger band, generating a buy signal.
On the weekly chart, the stock is forming a higher high-low formation and is holding above an upward-sloping trendline, indicating positive momentum.
The RSI weekly strength indicator is bullish and above its reference line, indicating a positive bias.
